The primary stock exchange in the United Kingdom is preparing to initiate the acceptance of applications for exchange-traded notes (ETNs) linked to cryptocurrencies.
According to a press release issued by the London Stock Exchange (LSE) on March 11, 2024, the exchange is scheduled to commence the acceptance of applications for Bitcoin (BTC) and Ethereum (ETH) crypto ETNs in the second quarter of 2024. Although the precise launch date is yet to be disclosed, the LSE intends to announce it “in due course,” aligning with the information outlined in the crypto ETN factsheet.
As outlined in the factsheet, crypto ETNs will be available for trading exclusively for professional investors within designated trading segments on the LSE. Each crypto ETN may offer up to three different currency lines, according to the factsheet.
Additionally, the document specifies that custody of the underlying crypto assets for ETNs must primarily be held in cold storage. While further details on this requirement are not provided by the LSE, it emphasizes that custodians must comply with anti-money laundering regulations in various jurisdictions, including the U.K., E.U., Jersey, Switzerland, or the U.S.
Following the announcement, the price of Bitcoin surged above $71,000, with Ethereum surpassing $4,000. However, it remains uncertain whether the LSE’s decision had a direct impact on the appreciation of cryptocurrency prices.
This move by the London Stock Exchange towards embracing web3 technologies is part of a broader exploration into the potential applications of blockchain technology. The exchange has been considering the integration of blockchain for traditional financial asset trading, as evidenced by its previous plans announced in September 2023 to introduce blockchain-based trading for traditional financial assets. This strategic shift underscores the LSE’s recognition of the potential benefits associated with blockchain integration within conventional markets.